Examining the Effects of Council Levies on Business Growth: Evidence from Traders at Lusaka City Market, Zambia

This study examined the effects of council levies on business growth among traders at City Market in Lusaka, Zambia. The study examined the effect of council levies on business operations, and pricing strategies with a sample size of 100 distinct traders, where 51.0% were females while 49.0% males. The findings show that council levies significantly increased the cost structure of traders' businesses. Over half (56%) reported modest increases in operating costs, while a fifth 20% reported severe increases. Majority to a tune of 73% of the traders paid levies monthly, with 39% responding to the increased costs by reducing operating expenses. Over a third, or 38%, responded by increasing selling prices, and 23% responded by purchasing smaller quantities of stock. The chi-square variance test confirmed significant variation in traders' responses to levy-related costs, with an observed variance of 1.604 larger than the predicted value, suggesting that respondents' cost management tactics varied more. The p-value of 0.0003, which is below the 0.05 significance level, was obtained from the computed chi-square statistic of 158.76 with 99 degrees of freedom, indicating that the variance differs considerably from the variance that was predicted. The findings further revealed that council levies had a significant negative effect on profitability. With the use of Regression analysis, the outcome displayed a substantial negative relationship between council levies and profitability (β = -0.316, p = 0.005), although the model explained 7.7% of the variation in profitability (R² = 0.077). On the other hand, about 46% of traders used cost-plus pricing, 33% considered competitors' prices, and 21% relied on fixed market prices. To add on, data were analyzed using a one-sample t-test, which showed that council levies significantly reduced traders' ability to maintain competitive prices (Mean = 2.04, t = -14.43, p < 0.001). The study concluded that council levies negatively affected business growth by increasing operating costs, reducing profitability, and influencing traders to raise selling prices. The study recommends that Lusaka City Council review the structure and administration of council levies to ensure that revenue generation is balanced with small-scale businesses